In Gary Lineker & Danielle Bux t/a Gary Lineker Media v HMRC [2023] TC8774, HMRC incorrectly challenged broadcaster Gary Lineker's contract with the BBC and BT. It lost a tax appeal against assessments for £4.9m. The First Tier Tribunal (FTT) found that while partnerships can be subject to IR35, the intermediaries' legislation, those rules did not apply as Mr Lineker had contracted with the Broadcasters personally. 

  • In 2013 and 2015 the BBC and BT Sport (the Broadcasters) entered into agreements with Gary Lineker Media (GLM), a partnership, for the services of Gary Lineker for television work.
  • The partners of GLM were Mr Lineker and Ms Bux his then-wife.
  • HMRC raised Regulation 80 Determinations looking to charge PAYE and NIC on the basis that the agreements would have represented Contracts of Employment and the IR35 Intermediaries Provisions applied.
  • Those determinations were Appealed to the FTT.

The Law

The IR35 Intermediaries legislation applies where the conditions in s.49(1) of ITEPA 2003 are met. These provide that:

  1. An individual (the worker) personally performs or is under the obligation to perform, services for another person (the client).
  2. The services are provided not under a contract directly between the client and the worker but under arrangements involving a third party (the intermediary).
  3. If the services were provided directly between the client and worker, the worker would be an employee or officer holder of the client.

This case focuses on condition b.

The FTT found that:

  • The IR35 intermediaries legislation can apply to partnerships as:
    • There was an express provision in the legislation which allows a partnership to be an intermediary.
    • The IR35 press release itself confirmed partnerships were included within the provisions.
  • When looked at in the round, GLM was a Valid Partnership as:
    • There was an intention to create a partnership and an agreement of partner roles and responsibilities was signed.
    • The partnership agreement gave rise to real rights and obligations.
    • There was a business in common between the partners; the promotion of Mr Lineker’s image.
    • Ms Bux had a fixed profit share for meeting her obligations, and while this meant there was no direct link between the partnership profits and her remuneration, this was not determinative.
    • The partnership agreement gave both partners access to all business accounts.
  • The contracts between the Broadcasters and Mr Lineker were direct as:
    • The 1890 Partnership Act gave the partners the power to bind the firm.
    • As each partner acts as principal and as agent, it followed in law that as Mr Lineker had signed the agreements as a principal he had contracted with the Broadcasters directly.
    • If Mr Lineker had not signed the contracts, he would not have had a direct contract, there would be an intermediary and in turn, the IR35 provisions could then apply.
  • As there were direct contracts between the Broadcasters and Mr Lineker the condition in s.49(1)(b) is not met and the intermediaries' legislation cannot apply.

The appeal was allowed.

Editorial comment

We think this is the first, and possibly, the last case on partnerships and IR35.

Useful guides on this topic

IR35: Off-Payroll Working
What is IR35? How does it work? How is the deemed payment calculated? What expenses are deductible?

Off-Payroll Working: At a glance (freeview)
What is Off-Payroll Working? What is IR35? What are the tax rules for Off-Payroll Working or IR35? How do you check employment status? What is a personal service company?

Recovery of PAYE: Regulation 80 and 72 assessments for PAYE
When can HMRC assess an employer or an employee for unpaid Pay-As-You-Earn (PAYE) and National Insurance Contributions (NICs)? What is a regulation 80 determination? What is a regulation 72 determination? Who is assessed and what are the conditions?

When does a partnership exist?
When does a partnership exist? Why does it matter? What are the implications for different taxes?

How to appeal an HMRC decision
Disagree with an HMRC decision? How to appeal, what type of decision can you appeal and what are your different options when you disagree with HMRC? What are the key steps in making an appeal?

External links

Gary Lineker & Danielle Bux v HMRC [2023] TC8774

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